SEC expects to pay whistleblower a record $30 million

BY KEN TYSIAC

The SEC expects to pay an award of more than $30 million to a whistleblower—a total that’s more than twice the previous record payout announced in the commission’s 2-year-old whistleblower program.

An informant living in a foreign country who provided important, original information that led to a successful SEC enforcement action will receive the award. SEC officials said in a news release that the award demonstrates the international reach of the whistleblower program.

As required by the whistleblower program mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, the SEC will not disclose the whistleblower’s name. The program gives the SEC the ability to pay for high-quality, original information that results in SEC enforcement actions with sanctions of more than $1 million.

Whistleblowers can receive 10% to 30% of the money collected in a case. The fund is financed through sanctions paid to the SEC by securities law violators.

The award announced Monday was the fourth given to a whistleblower living outside the United States.

“This whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect,” Andrew Ceresney, who directs the SEC’s Division of Enforcement, said in a news release. “This record-breaking award sends a strong message about our commitment to whistleblowers and the value they bring to law enforcement.”

The previous record for an SEC award to a whistleblower was $14 million, which was given in October 2013. The SEC has been paying monetary awards to whistleblowers since August 2012.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA editorial director.

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.